Kenya has unveiled a major package of tax and regulatory reforms aimed at boosting agricultural exports, as part of the Finance Bill 2026 set to be tabled in Parliament in March. 

The reforms are intended to ease cash flow pressures on exporters, unlock stalled capital, and restore confidence in the export sector after years of delayed VAT refunds and high levies.

Cabinet Secretary Sen. Mutahi Kagwe stated that the new measures are specifically designed to support Kenya’s export-led growth strategy, particularly across horticulture, tea, coffee and livestock value chains.

Among the proposals is a cut in input VAT from 16% to 8%, along with the removal of excise duty and export promotion levies on packaging materials. 

The government is also set to fast-track VAT refunds through offsetting and to grant long-standing 100% exporters EPZ- and SEZ-like treatment, eliminating VAT on local purchases.

In a move expected to reduce logistical bottlenecks, the reforms will also expand air freight capacity through Kenya Airways and new international carriers.

Kagwe announced the reforms during the launch of Flamingo Group Investments’ KSh 2 billion expansion project in Naivasha, which is set to create 500 jobs and expand value-added flower production for export to Europe and the UK.

He confirmed that the government has already paid KSh 470 million of Flamingo’s KSh 1.8 billion VAT refund backlog, with further disbursements planned.

Industry experts say the reforms are expected to unlock billions of shillings in stalled exporter capital and accelerate investment across key agricultural value chains. 

If fully implemented, the measures could strengthen Kenya’s competitiveness and further cement its position as Africa’s horticultural powerhouse.

Source: Kenya Ministry of Agriculture